The ACIT, Central Circle-2, Visakhapatnam V. M/s Gayatri Vidya Parishad, Visakhapatnam

ITSSA 21/VIZ/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9408 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 01-04-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• Keywords: Charitable institution; Block assessment
• Section: 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER IT(SS)A NO.21/VIZAG/2004 BLOCK ASSESSMENT PERIOD: 1.4.90 TO 29.11.2000 ACIT, CENTRAL CIRCLE-2 VISAKHAPATNAM GAYATRI VIDYA PARISHAD, VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAAAG 0434F IT(SS)A NO.23/VIZAG/2004 BLOCK ASSESSMENT PERIOD ENDED ON : 29.11.2000 GAYATRI VIDYA PARISHAD, VISAKHAPATNAM ACIT, CENTRAL CIRCLE-2 VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI SUBRATA SARKAR, DR RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE CIT(A). SINCE COM MON ISSUES ARE INVOLVED IN THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER. BOTH THE PARTIES HAVE RAISED VARIOUS GROUNDS IN THEIR RESPECTIVE APPEALS BUT THEY ALL RE LATES TO AN ADDITION MADE ON THE BASIS OF RECEIPT OF DONATIONS NOTED ON THE D OCUMENT SEIZED DURING THE COURSE OF SEARCH. 2. THE FACT IN BRIEF LEAD TO THE CONTROVERSY INVOLV ED IN THESE APPEALS ARE THAT ASSESSEE WAS SEARCHED U/S 132 OF THE I.T. ACT AND DURING THE COURSE OF SEARCH SOME INCRIMINATING DOCUMENTS WERE FOUND ON W HICH THE RECEIPTS OF DONATIONS FROM THE PARENTS OF THE STUDENTS WERE REC ORDED. THE STATEMENT OF THE SECRETARY OF THE TRUST WAS ALSO RECORDED AND HE HAS ADMITTED IN THE STATEMENT THAT THE TRUST HAS RECEIVED DONATIONS FRO M PARENTS OF THE STUDENTS, 2 SEEKING ADMISSION TO ITS ENGINEERING COLLEGE AND TH AT SUCH DONATIONS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE TRUST. HE HAS ALSO STATED THAT DONATIONS WERE UTILIZED FOR THE PURPOSE OF ACQUIRIN G LAND AND CONSTRUCTION OF BUILDING THERE ON FOR THE TRUST AND THAT SUCH EXPEN SES WERE ALSO NOT RECORDED IN THE BOOKS OF THE TRUST. IN THE SEIZED MATERIAL, THERE WERE ENTRIES OF THE RECEIPT OF DONATIONS FROM THE CANDIDATES SEE KING ADMISSION IN ENGINEERING COLLEGE AND ALSO OF THE EXPENSES INCURR ED FOR ACQUIRING LAND AND FOR CONSTRUCTION FOR THE BUILDINGS ETC. THE ASSESS ING OFFICER HAS COMPUTED THE UNACCOUNTED RECEIPT OF THE DONATIONS AT RS.25 LAKHS AND MADE THE ADDITION OF THE SAME WITHOUT TAKING INTO ACCOUNT THE DETAILS OF EXPENSES FOUND ON THE SEIZED MATERIAL. ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A) AND FURNISHED THE COMPLETE DETAILS AND THE CIT(A) RE-EX AMINED THE ISSUE IN THE LIGHT OF ENTRIES FOUND ON THE SEIZED MATERIALS AND HAS OPINED THAT DOCUMENTS FOUND DURING THE COURSE OF SEARCH SHOULD BE READ IN TOTO AND IF THE RECEIPTS ARE TAKEN INTO ACCOUNT THE EXPENSES RECORDED IN THE SEIZED MATERIAL SHOULD NOT BE IGNORED. AFTER GIVING A CREDIT OF THE RECOR DED EXPENSES ON THE SEIZED MATERIAL, THE CIT(A) RESTRICTED THE ADDITIONS TO RS .6,38,000/-. 3. THE ORDER OF THE CIT(A) HAS CHALLENGED BEFORE US . THE ASSESSEE WANTS THE DELETION OF THE ENTIRE ADDITIONS AND THE REVENU E SEEKS THE ADDITION OF THE ENTIRE RECEIPT OF DONATIONS. WE HAVE HEARD THE RIV AL SUBMISSIONS AND CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITI ES AND WE FIND THAT THE ASSESSING OFFICER HAS TAKEN A NOTE ONLY OF THE RECE IPT OF DONATIONS RECORDED ON THE SEIZED MATERIALS AND HE HAS NOT GIVEN ANY CR EDIT OF THE EXPENSES RECORDED THEREON. WHEREAS, CIT(A) HAS TAKEN INTO A CCOUNT OF ENTRIES RECORDED ON THE SEIZED MATERIALS. THE LD. COUNSEL FOR THE ASSESSEES HAS ALSO REQUESTED THAT SINCE THE DONATIONS WERE UTILIZED FO R THE CHARITABLE PURPOSE OF THE TRUST, THE ENTIRE RECEIPT IS EXEMPTED FROM TAX U/S 11 OF THE ACT. WE DO NOT FIND ANY FORCE IN THIS ARGUMENT OF THE ASSESSEE S BECAUSE FOR CLAIMING AN EXEMPTION, THE DONATIONS SHOULD HAVE BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. WE ARE DEALING WITH THE ISSUE WITH REGARD TO THE RECEIPT OF DONATIONS AND THE EXPENSES WHICH ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. IT IS A SETTLED POSITION OF LAW THAT WHE NEVER ENTRIES OF THE DOCUMENTS ARE TO BE CONSIDERED, IT SHOULD BE CONSID ERED IN TOTO AND NOT IN 3 PIECEMEAL. UNDISPUTEDLY ON A SEIZED MATERIAL, DONA TIONS AS WELL AS EXPENSES WERE RECORDED AND THE ASSESSING OFFICER SHOULD HAVE TAKEN A NOTE OF BOTH THE ENTRIES BUT HE DID NOT DO SO; WHEREAS THE CIT(A) HA S TAKEN NOTE OF IT AND HAS ALLOWED THE CREDIT OF THE EXPENSES INCURRED BY THE ASSESSEES, WHICH ARE RECORDED ON THE SEIZED MATERIAL. CIT(A) HAS HOWEVER , DID NOT GIVE A CREDIT OF THOSE VOUCHERS OF EXPENSES WHICH WERE NEITHER FOUND DURING THE COURSE OF SEARCH NOR ANY ENTRIES IN THAT REGARD ARE RECORDED IN THE SEIZED MATERIAL. THE VOUCHERS PREPARED AFTER THE SEARCH FOR THOSE EXPENS ES WHICH WERE CLAIMED TO HAVE BEEN INCURRED OUT OF THE DONATIONS RECEIVED, C ANNOT BE CONSIDERED BECAUSE IT DOES NOT PERTAIN TO THE SEIZED MATERIALS . WE THEREFORE OF THE VIEW THAT CIT(A) HAS RIGHTLY ADJUDICATED THE ISSUE AND W E FIND NO INFIRMITY THEREIN. ACCORDINGLY, WE CONFIRM HIS ORDER. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WEL L AS REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 5-3-.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 5 TH MARCH, 2010 COPY TO 1 ACIT, CENTRAL CIRCLE-2, VISAKHAPATNAM 2 GAYATRI VIDYA PARISHAD, D.NO.1-83-21/3, SECTOR-8, MVP COLONY, VISAKHAPATNAM 3 THE CIT, VISAKHAPATNAM 4 THE CIT(A)-1, VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM